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Using the lease value rule, what is the valuation of Brent's company car benefit?

Using the lease value rule, what is the valuation of Brent's company car benefit?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Brent Bishop is the vice president of operations for Southern Sweets Bakery. He drives a 2020 Toyota Prius as his company car, and it has a fair market value of $41,500. The prorated annual lease value per Publication 15-b for the vehicle is $10,750. He reported driving 34,800 miles during 2020, of which 20 percent were for personal reasons. The company pays his fuel and charges him five cents per mile for fuel charges. Required: Using the lease value rule, what is the valuation of Brent's company car benefit? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Valuation of Brent's company car benefit
Transcribed Image Text:Brent Bishop is the vice president of operations for Southern Sweets Bakery. He drives a 2020 Toyota Prius as his company car, and it has a fair market value of $41,500. The prorated annual lease value per Publication 15-b for the vehicle is $10,750. He reported driving 34,800 miles during 2020, of which 20 percent were for personal reasons. The company pays his fuel and charges him five cents per mile for fuel charges. Required: Using the lease value rule, what is the valuation of Brent's company car benefit? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Valuation of Brent's company car benefit
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